The US Centers for Medicare and Medicaid Services (CMS) has released the final guidelines for implementation of the GLOBE Most Favored Nation (MFN) pricing model. GlobalData, a leading intelligence and productivity platform, with many years of experience in drug pricing and international reference pricing (IRP) analysis, has produced research highlighting the difficulties CMS will face with implementing the GLOBE pricing demonstration model.
GLOBE, which stands for Global Benchmark for Efficient Drug Pricing, is a seven-year demonstration model that allows CMS to calculate mandatory rebates pharma companies should provide to around 25% of patients with Medicare Part B prescriptions by estimating what the US price of a drug should be in relation to its prices in a set of 19 reference countries*. Under GLOBE, CMS will reference either the lowest level of list prices among the reference countries, adjusted by GDP and purchasing power parities (PPP), or the average level of net prices across those countries.
Milena Izmirlieva, Senior Director and Head of Health Economics and Market Access Research and Analysis at GlobalData, comments: “GlobalData does not expect pharma companies to provide CMS with net prices, so the most likely scenario is CMS will be referencing the lowest list price in these 19 countries and require companies to provide a rebate to match it. The final guidelines provide additional details about how GLOBE will be implemented and confirm that its launch will be delayed. Notably, CMS published the final guidelines in the Federal Register, effectively trying to codify the guidelines, even though GLOBE is a pilot project and not a policy reform approved by Congress.”
PhRMA, the association representing pharmaceutical companies in the US, has now sued the US government, alleging that GLOBE is an attempt to implement a sweeping pricing reform without Congressional approval, rather than a test model.
Izmirlieva continues: “GlobalData’s analysis in July already highlighted the possibility of precisely this legal action as one of several defensive strategies the pharma industry can utilize to derail MFN implementation. Executive overreach and backdoor policy implementation are precisely the reason why Donald Trump’s previous attempt to impose MFN pricing for Medicare Part B drugs failed during his first term.”
There are important differences between the initial proposal for the GLOBE model and the final version Izmirlieva identified in her recent analysis, several of which are listed below:
- Orphan-only medicines, biosimilars, plasma-derived products and certain cell and gene therapies are explicitly exempted from GLOBE
- Once a medicine reaches the spending charges threshold to qualify for rebate calculation under GLOBE, it will remain subject to the GLOBE model even if spending drops below the threshold in subsequent 12-month periods
- If a product price is not available in any of the reference countries, CMS will continue monitoring in each subsequent quarter until foreign prices are found
- CMS will review historical prices to see if prices have disappeared from price lists, which could be seen as a sign that a pharmaceutical company is trying to hide its foreign prices to avoid referencing.
The full analysis is available to clients of GlobalData’s Price Intelligence (POLI) service. To request access to the POLI database, please reach out to: https://marketaccess.globaldata.com/contact-us
GlobalData’s POLI database is among the sources the CMS will extract foreign process from for the GLOBE model calculations. Izmirlieva’s full assessment of the challenges with MFN implementation and the strategic options available to pharma companies in the increasingly unpredictable US pricing policy environment is available on the GlobalData report store here: Three Possible Scenarios for MFN Implementation in the US: What Can Pharma Expect and What Are the Possible Strategies to Protect Revenue.
Additionally, GlobalData produces bespoke assessments of MFN reform impact on individual company portfolios and on other markets likely to be affected by the US MFN initiatives.
Chris Reynolds, Head of Global Market Access Healthcare Consulting at GlobalData, adds: “MFN drug pricing policy is reshaping the global pharmaceutical pricing landscape. Understanding its origins, mechanics, and downstream consequences requires structured data, deep local market expertise, and scenario-based strategic thinking. These assessments can support clients on the strategic implications of MFN, including quantifying country specific impact or company portfolio-level exposure. This enables the testing of alternative scenarios and evaluation of the potential impact on international launch sequencing and global pricing strategy. A recent case study demonstrating our consulting skills is available upon request.”
GlobalData’s Health Economics and Market Access Research and Analysis team will host a conference on 8 December, featuring several analyst presentations examining the latest changes in IRP regulations around the world, including progress with MFN implementation. The conference registration link is available here.
* The countries whose prices the US will reference under GLOBE are Australia, Austria, Belgium, Canada, Czechia, Denmark, France, Germany, Ireland, Israel, Italy, Japan, Netherlands, Norway, South Korea, Spain, Sweden, Switzerland, and the UK.
